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North Carolina Minimum Wage Increase Also Affects Tipped Employees

    Client Alerts
  • January 26, 2007

Effective January 1, 2007, North Carolina's minimum wage increased to $6.15 per hour.  This increase in the minimum wage requirement also changed the minimum rate of pay for tipped employees.  Employers who claim a “tip credit” must pay $3.13 an hour to tipped employees who earn at least $3.02 per hour in tips.  If a tipped employee earns less than $3.02 an hour in tips, the employer must compensate the employee so that they make at least $6.15 an hour.


The “tip credit” allows a North Carolina employer to take credit for a certain amount of tips earned by their employees in order to reach the minimum wage.  In order to take a “tip credit,” an employer must notify the employee in advance and allow the tipped employee to retain all tips.  Tip pooling is permitted as long as the employee retains at least 85% of the tips they receive.